Toys, beds, carriers/kennels, collars/leashes, feeders/ waterers, litterboxes and
apparel. What do these categories have in common? They
comprise the core of the the U.S.
pet market’s durables segment,
ringing up $3.6 billion at retail
in 2015.

This number represents 8 percent of all pet product sales and
23 percent of nonfood pet product sales, and it is expected to top
$4.1 billion by 2020, according to
Packaged Facts’ September 2016
market report, Durable Dog and
Cat Petcare Products in the U.S.,
which divides the market into the
seven categories noted above.

Numerous marketers are angling to compete across most, if
not all, of these categories. Of
course, cross-category competition in the pet market is not new.

However, these days the
cross-category activity is less likely to involve an umbrella brand
such as Hartz and more likely to
involve a stable of complementary brands. Also, the company
fielding said brands is less likely
to have developed them from the
ground up, instead having cut to
the chase by snapping up an innovator with a hip brand.

Mergers and acquisitions arethe mechanism, with no shortageof examples. In March 2015, petcollar and leash kingpin CoastalPet Products Inc. snapped upBergan Pet LLC, adding trendytravel products such as automo-tive pet harnesses and gainingentry into the toy and feeding/watering categories.Also multiplying its pet dura-bles reach, in May 2015 World-wise Inc. merged with QuakerPet Group, combining Quaker’sdog toy and carrier business—Sherpa, goDog and Hear Dog-gy!—with Worldwise’s pet bed-ding and cat scratchers and toys.When it comes to cross-category expansion via acquisi-tion, perhaps no company hasbeen more active than Petmate(aka Doskocil). From its earlybase as a leader in plastic petproducts (litterboxes, pet car-riers, etc.), the company hasbranched out to acquire a stableof brands that includes Chuckit!(dog toys), JW Pet (dog and cattoys, feeding bowls) and AspenPet (bedding, collars/leash-es, feeding/watering, groom-ing, kennels/carriers), alongwith the licensed Jackson Galaxy(cat toys and bedding), MuttNa-tion (apparel, bedding, collars/leashes, dog toys, feeding/wa-tering) and WWE (bedding, col-lars/leashes, dog toys) brands.Its most recent acquisition, ofPrecision Pet Products in July2016, added wire crates andwooden doghouses.None of this is any coinci-dence. In January 2011, Petmatewas itself acquired by privateequity outfit Wind Point Part-ners, whose “value creation planincludes driving new productinnovation, improving market-ing and expanding the [Petmate]product portfolio through com-plementary add-on acquisitionsin the highly fragmented durablepet products market.”It sounds like one to watch,whether for an IPO or a mergerwith another pet industry lead-er. Most interesting, and unorth-odox, would be a team-up witha big-name pet food marketer,as to-date the food and nonfoodsides of the pet business have re-mained mostly separate.

For obvious reasons, this
strategy could be a boon to pet
industry players such as Petmate
and Wind Point. Longer-term,
however, the most important impact of brand stabling might be
its capacity to help lure entrepreneurs into a market where innovation can be priceless, because,
while not every startup aims to
one day cash-out for a tidy sum,
it doesn’t hurt to have that possibility on the table.

Opportunities in BrandStabling Durable Pet ProductsMARKET OUTLOOK

DAVID LUMMIS is the lead pet-mar-ket analyst for PACKAGED FACTS,
a division of MARKETRESEARCH.
COM. He wrote the Packaged
Facts’ report referenced here,
Durable Dog and Cat Petcare
Products in the U.S. (September
2016) www.packagedfacts.com/
pet-products-services-c124.